Engineering services firm Monadelphous Group has lifted half-year profit by nearly a third as it rides the rebound in activity in the resources sector.
The company posted net profit of $37.6 million for the six months to December 31, up 32 per cent from a year ago after the high volume of contracts secured over the past 18 months pushed up revenue by 36 per cent.
Managing director Rob Velletri said the result reflected the company’s strengthening market position and its ability to capitalise on improving levels of demand.
“Market conditions in our core resources market have improved, with solid demand expected to continue for sustaining and brownfield capital works,” he said on Tuesday.
“Major construction prospects are improving, particularly in iron ore, and demand for maintenance services is expected to remain strong.”
The company has secured contracts worth $385 million since the start of the financial year, including a two-year supply maintenance contract to for Rio Tinto in the Pilbara, a 12-month extension contract at Woodside’s Karratha gas plant and a number of new deals in North America, New Zealand, Mongolia and PNG.
Revenue in its engineering construction division jumped 63 per cent in the half year, driven mostly by increased activity at the Ichthys LNG project in Darwin and growth in the water and renewables segments.
The maintenance and industrial services division saw an 18 per cent rise in topline to a record $400.7 million, as demand for maintenance services increased across the resources and energy sectors.
Monadelphous expects revenue growth to moderate in the second half of the year, but still expects full year revenue to increase around 30 per cent.
The company declared a fully franked interim dividend of 30 cents, up six cents.
By 1400 AEDT, Monadelphous shares were up 1.7 per cent to $18.25 in a weak Australian market.
MONADELPHOUS LIFTS H1 PROFIT
* Net profit up 31.6pct to $37.6m
* Revenue up 35.5pct to $849.7m
* Interim dividend up 6.0 cents to 30 cents, fully franked